(SNB) The Swiss National Bank says it has used a digital version of currency to settle transactions with five different banks.
Known as Project Helvetia, the trials were conducted in conjunction with the Bank of International Settlements and the stock Exchange, SIX. The five commercial banks that were involved were Citi, Goldman Sachs, Credit Suisse, UBS, and Hypothekarbank Lenzburg.
The “wholesale” CBDC showed that it was feasible to execute payments instantly ranging from 100,000 to 5 million Swiss francs or $109,469 to $5.47 million, eradicating the risk of the transaction to the counterparty.
Supporters say Wholesale CBDCs will streamline security deals settlements, which can be unusually lengthy when several parties are involved. The CBDC can also act as security after the digital transaction is completed.
A wholesale CBDC allows the connection of various financial market systems while streamlining transactions to allow a digital cash token to be swapped with a token representing another financial asset.
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